Globes Lawsuit Sticks HFPA With $11 Million Bill
Big loss could hurt charitable giving, but a second trial phase could reverse fortunes.
When federal judge Howard Matz ruled April 30 that Dick Clark Productions can continue to produce the Golden Globes on NBC, he noted that the Hollywood Foreign Press Association long has "suffered from the absence of sound, businesslike practices." It now appears that pursuing the Globes litigation in the first place might be an example of that lack of discretion. Sources tell THR that the group that owns the Globes has spent more than $11 million on legal fees this year (up from $3.7 million in 2011 and just $68,591 as recently as 2009), nearly all of it on the litigation attempting to boot DCP as Globes producer. As a result, the HFPA's total assets have dwindled sharply from $21.4 million at the end of 2011, according to sources with knowledge of the group's finances (the HFPA declined comment). The group spent heavily on A-list litigator Daniel Petrocelli because a victory would have meant the HFPA would receive all of the annual Globes license fee (more than $21 million a year until 2018) instead of splitting it with DCP, as has been the arrangement since 1983. The drop in assets could have an immediate impact on the HFPA's charitable giving, which in 2011 was about $1.8 million to groups ranging from film preservationists to minority students. It also could force the 90 or so HFPA members, headed by president Aida Takla-O'Reilly, to curtail trips to film festivals and media junkets. And the case isn't over. Petrocelli tells THR that he is planning an appeal of Matz's 87-page decision, but he hasn't decided if it will come before or after phase two of the trial. That second proceeding, which may be six months or more away, could contain a silver lining for the HFPA. In addition to determining digital rights to the Globes, as well as who will produce the preshow telecast, the HFPA will argue that by making a quick deal with NBC, DCP, led by president Orly Adelson, failed to maximize the value of the Globes. If the HFPA wins that argument, it could invalidate the entire Globes deal -- making the investment in the litigation well worth the trouble.
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